updated 11:45 pm EST, Thu December 27, 2007
Wal-Mart Axes Videos
Wal-Mart has shut down its fledgling movie service with virtually no announcement, according to user reports. Visitors to the official site are greeted with a message that the site has shut down as of December 21st and redirects users to information about the closure. Videos and other content remain playable but will still include the copy restrictions of before, which prevent the videos from transferring to non-purchasing computers but allow their use on as many as three portable media players that support guarded Windows Media content. No refunds are available and customers will have to visit a Wal-Mart store to buy more videos, the retailer warns.
The shutdown comes just 10 months after the opening of the store in February and is the result of poor sales despite the shop remaining in a beta (testing) state, Wal-Mart and its content system provider Hewlett-Packard say. While Wal-Mart is not directly responsible for shutting down the store, sub-par income for HP has forced an early termination of the backbone behind the service and left Wal-Mart with little choice, according to a Wal-Mart spokesperson.
An end to Wal-Mart's store dashes the early hopes of movie studios. The video download site was the first to sign all major Hollywood production houses to its catalog, potentially supplying the retail chain with an edge over Apple's iTunes Store and other services that have unsuccessfully negotiated licenses for key studios or else are limited to older titles. Wal-Mart is rumored to have been instrumental in blocking some deals with Apple to shelter its lucrative physical video sales, which account for a large portion of all video revenues in the US.
The firm's efforts to sell videos online are winding down just as word has surfaced that Apple may be opening an iTunes movie rental service that would enlist at least 20th Century Fox and would likely involve Disney as well, playing on Apple chief Steve Jobs' membership on the Disney board of directors. Wal-Mart's store has only allowed purchases since its opening and may have suffered from this decision as a result.